For the first time, a consortium of top U.S. cancer hospitals will provide patients with guidance about the cost of drugs used in their treatment, helping address a concern for many people undergoing a major medical event – what the financial repercussions of their condition are.
The information will supplement summaries the group has provided for 20 years on the effectiveness, side effects and evidence backing the therapies. The guidelines are being issued during a national conversation about the cost of drugs that has become a focus of Democratic presidential candidates and weighed on biotechnology stocks.
“There is a tide turning when it comes to costs,” said Robert Carlson, chief executive officer of the National Comprehensive Cancer Network, a non-profit group that includes top hospitals like the Mayo Clinic, Dana-Farber Cancer Institute and 24 others. “Our goal is to get the conversation started between the patient and the health-care team so they understand the trade-offs,” he said. “If as an artifact of that we were to make health care more affordable, that would be wonderful.”
Health insurers and many doctors already rely on the NCCN’s separate, formal guidelines that establish the standard of care. Those recommendations don’t consider cost. The new guidance will be an additional set of information doctors can share with their patients while discussing treatment options.
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The guidelines will be available to all, not just hospitals in the cancer network. They’re also general – they don’t provide an actual dollar figure, and don’t account for how much of the cost insurance will cover. Instead, drugs are ranked on a scale of 1 to 5 for affordability, in the same way the group ranks other aspects of a therapy, like how toxic it is or how effective it was in clinical trials.
“There is this lack of linkage between cost and effectiveness and toxicity,” Carlson said. “That just doesn’t make sense to many people – in fact most people – within the health-care delivery system.”
It’s important for patients to have access to coverage and be able to work with their doctors to choose their care, said Holly Campbell, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, an industry trade group. “PhRMA supports the development and use of sound, patient-centered tools to help guide decisions about which treatment options are best for the individual patient,” she said.
While the guidelines aren’t very likely to provoke immediate change in what pharmaceutical companies charge, they’re designed to make patients more aware of the cost of drugs before treatment.
That could influence the ongoing conversation about prices in the U.S. The American health-care system disconnects the treatment choices made by doctors and patients from the insurers who pay for them, limiting pressure on drugmakers to keep prices down, said Niam Yaraghi, a fellow at the Center for Technology Innovation at the Brookings Institution. Many of those costs then get passed along to patients in the form of cost-sharing and co-payments.
“Regardless of the effectiveness of the innovation, regardless of how much longer I would live if I took this expensive cancer drug, as long as it’s approved they have no choice but to pay for it,” Yaraghi said. “We have created a luxury market for a necessary commodity.”
However, consumers are becoming more conscious of treatment costs as insurers pass on a higher proportion of the costs. Since 2010, deductibles for employer-sponsored plans are up 67 percent, while insurance premiums are up 24 percent, according to a September report on by the research groups Kaiser Family Foundation and the Health Research & Educational Trust. Worker earnings, by contrast, rose just 10 percent over that period, according to Kaiser’s analysis of Bureau of Labor Statistics data.
“A number of stakeholders were becoming increasingly concerned about the cost of care, so we wanted to add some metric to our guidelines that talked about affordability,” Carlson said. “We wanted a system that would facilitate conversations between patients and their physicians on issues the patient felt were important.”
Carlson said he conceived of the idea 18 months ago, before the current uproar over drug costs that started when a small drug company, Turing Pharmaceuticals AG, raised the price of the pill Daraprim from $13.50 to $750 overnight, causing widespread outrage. Turing has said it plans to reduce the drug’s price.
While drugmakers invest billions of dollars to develop new cancer medicines, a new drug’s price can sometimes increase the cost of treatment disproportionately compared with the length of time it extends life. Organizations like the American Society for Clinical Oncology and doctors at Memorial Sloan-Kettering Cancer Center in New York have been advocating for restraint and prices tied to patient benefit.
The new cost ratings are going into what the NCCN calls “Evidence Blocks,” easy-to-understand graphics meant to help patients and doctors discuss a treatment. The affordability rating includes not just the price of the drug, but also supportive care such as anti-nausea medicine, monitoring expenses, treatment of toxicity or side effects, and fees for the hospital or another location where the drug is given. The first five-point ratings will be issued this week for chronic myelogenous leukemia and multiple myeloma, two different types of blood cancer.
It will take patient involvement to get rising prices under control, said Steve Miller, chief medical officer at Express Scripts Holding Co., the nation’s largest manager of prescription drug benefits in the U.S., at a Pew Charitable Trusts conference last week on paying for value in health care.
“We have to bring cost into consideration,” Miller said. “It is the patient that has the power. They are the ones Congress will listen to. We have to activate the patient groups if we are going to get to the fair price.”